Tesla is nearing the completion of its lithium-iron-phosphate (LFP) battery cell factory in Nevada, as the electric vehicle maker moves to localize production and reduce reliance on Chinese suppliers. The facility is expected to begin small-scale production soon.
The new plant represents a strategic effort to mitigate the impact of U.S.-China trade tensions, which have intensified in recent years. Currently, Tesla sources LFP battery cells for its most affordable electric vehicles and energy storage products—such as the Megapack and Powerwall—primarily from China. Existing tariffs of 25% on Chinese battery cells, with the potential for further increases, have added urgency to Tesla’s domestic manufacturing plans.
Nearing completion of our first LFP cell manufacturing factory in North America pic.twitter.com/OLNRWajz4l
— Tesla (@Tesla) June 28, 2025
The Nevada facility, initially proposed prior to tariff escalations under former President Donald Trump, has been outfitted with previously used equipment secured from CATL, one of Tesla’s major suppliers. Once operational, the plant is expected to produce around 10 GWh of LFP battery cells annually. These cells will likely be used in Megapack production at Tesla’s U.S.-based factories.
Tesla also operates a Megapack production facility in California with an annual capacity of 40 GWh, and another facility is under development in Texas. The new Nevada site is part of a broader strategy to bolster domestic energy storage manufacturing capabilities.
In parallel, Ford is constructing its own LFP battery plant in Michigan, targeting a significantly larger production scale of 35 GWh per year. The industry-wide pivot to local battery production reflects broader efforts to insulate supply chains from geopolitical risks and meet growing demand for electric vehicles and energy storage solutions.